Integrative research into the financial services industry in Taiwan: Relationship bonding tactics, relationship quality
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Chiung-Ju Liang is an assistant professor of business administration at the National Taiwan University of Science and Technology. Her research focuses on relationship marketing, consumer loyalty and strategic marketing.
Wen-Hung Wang is an assistant professor in the Department of Business Administration, Chung-Kuo Institute of Technology.
Abstract This study develops and empirically tests a conceptual model examining the interdiscipline between relationship bonding tactics, customer satisfaction, trust/commitment and customer behavioural loyalty in a relationship marketing system. Based on three groups of samples from XYZ bank, one of the well-established merchant banks in Taiwan, the study’s findings suggest that financial products with different product attributes will benefit the most from individual types and levels of relationship investment that can be applied directly to each product. Keywords Relationship marketing, relationship quality, financial services industry, behavioural loyalty, LISREL
INTRODUCTION
Chiung-Ju Liang Dept. of Business Administration, National Taiwan University of Science and Technology, 43 Keelung Road, Section 4, Tapei 106, Taiwan Tel: +886 (02) 27333141 ext. 6507; Fax: +886 (02) 27376744; e-mail: [email protected]
In the current marketplace, much attention has been paid to the concept of relationship,1–3 and this concept has been enthusiastically embraced by both academics and practitioners.3–5 Particularly, research has shown that relationship marketing is an appropriate strategy for commercial bankers.6–8 Kimball (1990)9 has suggested that ‘relationship and product oriented strategies are diametrically opposed to one another, with relationship-oriented banks endeavoring to prolong the relationship with customers, and product-oriented banks chipping away at competitors’ relationship-oriented customers.’
# Henry Stewart Publications 1479–1846 (2005)
Vol. 10, 1 65–83
As in many other service businesses, the intangibility of many services in the banking sector highlights the importance of customer relationships management. The economic benefits associated with customer satisfaction are also well established. Thus it has been shown that customers (both corporations and individuals) who have been with a bank for five years have achieved much more profitability than those in the first year of a banking relationship.10 Further findings11 also indicate that an average retail bank retains between 80 and 85 per cent of its depositors, and that even a small improvement in this rate leads to higher profit. Therefore, ongoing customer relationships are worth more to the bank
Journal of Financial Services Marketing
65
Liang and Wang
than new ones: longer established customers have higher account balances, relatively lower account costs, and are more likely to use other bank products and services. Even though academics recognise the importance of relationship marketing practices,5,12 empirical evidence on the nature and extent of the impact of relationship bonding tactics on relationship q
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